Chapter 13 Repayment Plans
A chapter 13 is a repayment plan that allows you to repay your debts over time from anywhere from 36 to 60 months. Someone typically would do a chapter 13 to pay off mortgage or car arrears. They want to keep their house from being foreclosed or their car from being repossessed, and they want to come up with a repayment plan to pay it off so they can keep that collateral. Another reason you would file chapter 13 instead of chapter 7 is you might be ineligible for Chapter 7 because of a previous filing or you’re an ineligible for Chapter 7 because you too make too much money and you do not qualify under the means test. The final reason you might file chapter 13 over chapter 7 is because you have nondischargeable debt that that really you just want a payoff just over repayment plan. A chapter 7 cannot help you in this instance. If you had a lot of tax debt that’s not dischargeable or student loan debt, you could file a chapter 13 to pay it off. What happens in a chapter 13 bankruptcy will just like a chapter 7 bankruptcy in that you have the meaning of creditors. You meet the trustee shortly after you file your case and the trustee asks similar questions to the meeting of creditors in a chapter 7 bankruptcy. After the meeting in a chapter 13, the trustee will state his or her objections and you and your attorney will have about a month or so to cure those objections prior to confirmation hearing. Additionally, creditors can file objections which the debtor could need to cure as well. If you have satisfied all objections you can get your plan confirmed provided you have done certain things that you need to do, like make all your trustee payment since the case was filed. You also have to prove to the trustee you have made your payment every month on your mortgage. If you claim charitable deductions, you have to prove you made those since the case was filed. You also might need to prove your contributing to a of a savings account if you’re self-employed and need to preserve money for ongoing taxes. So if you can resolve of those objections you get your plan confirmed. If you can’t, you could have your plan dismissed at confirmation or maybe you get your confirmation hearing reset to give you a little more time to fix those objections. Now after the plan is confirmed, that is not the end of it. Remember you’re in a 36 to 60 month repayment plan, so things could come up in the middle. For instance, you could lose your job or you could have your hours reduced. You could have major medical bills or you could of home repairs. You could have something that requires you to ask the trustee for a couple months off for your repayments. You could have your mortgage modified, even after confirmation. So you just can never know what to expect, and as things come up you have to work with the trustee to get this resolved fairly to both you and your creditors to allow you to continue with the plan.